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U.S. stocks slip as focus shifts to key inflation data

Published 28/02/2024, 01:22
Updated 28/02/2024, 21:38
© Reuters

Investing.com-- U.S. stocks slipped Wednesday, though losses were kept in check by the broadening of the rally beyond big tech as investors continued to digest ongoing quarterly earnings ahead of the Fed's key inflation measure due Thursday.    

By 15:30 ET (20:30 GMT), the Dow Jones Industrial Average fell 50 points, or 0.1%, S&P 500 fell 0.1%, lower and NASDAQ Composite dropped 0.5%.

Signs of cooling in economy ahead PCE inflation in focus

The U.S. economy expanded at a 3.2% annualized rate in the fourth quarter, revised slightly down from the previously reported 3.3% pace, and a drop from 4.9% growth the prior quarter.

"While the minimal revision to fourth-quarter GDP underscores the ongoing storyline of a strong economy and resilient consumer [...] momentum clearly slowed from an outsized rise of near 5% in the third quarter into year-end," Stifel said in a note. 

The weaker growth data come just a day ahead of the PCE price index, the Fed’s preferred inflation gauge, that is likely to factor into the central bank’s outlook on interest rates. 

"The positive economic outlook bodes well for corporate earnings," said Salvatore Ruscitti, U.S. equities strategist with MRB Partners. "Earnings growth should be less narrow this year, thereby supporting a broadening of equity market leadership."

Beyond Meat sizzles on margin outlook; TJX continues retail-earnings parade 

Beyond Meat Inc (NASDAQ:BYND) surged over 32% after reporting better-than-expected quarterly revenue, and also forecasting a improved margins in the second-half of the year amid a turnaround plan. 

“Our 2024 plan includes taking steps to steeply reduce operating expense and cash use,” Beyond Meat CEO Ethan Brown said in a statement.

TJX Companies (NYSE:TJX) rose 1% after the retailer reported higher-than-anticipated sales growth in the fourth quarter, but offered up soft future guidance, which some on Wall Street believe is conservative and likely beatable.

Urban Outfitters (NASDAQ:URBN), meanwhile, slumped 13% on disappointing earnings.

Ebay shines on earnings stage, Bumble stumbles after app backtrack

E-commerce site eBay (NASDAQ:EBAY) rose 8% on stronger-than-expected earnings and guidance that likely paves the way for a return to mid-single-digit gross merchandise value growth in 2025, Deutsche Bank said in a note.

Online dating company Bumble (NASDAQ:BMBL) lost 14% on weak revenue guidance amid plans to revamp its dating app to boost user growth. The stock will likely remain rangebound until there is "evidence of an improvement in the top of funnel in North America or the Bumble App relaunch accelerates revenue growth," UBS said in a note.

Crypto stocks surge as bitcoin tops $60K

Cryptocurrency stocks including Marathon Digital Holdings Inc (NASDAQ:MARA), Riot Platforms (NASDAQ:RIOT), and Coinbase Global Inc (NASDAQ:COIN) surged, with the latter hitting a new 52-week high, underpinned by a jump in bitcoin above $60,000. 

The move higher comes ahead of the crypto's halvening -- expected as soon as April - that occurs roughly every four years and cuts the reward for mining new blocks in half.

Halvening events in both 2012, 2016, and 2020 had preceded previous bull runs for BTC. 

(Peter Nurse, Ambar Warrick contributed to this article.)

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